(b)references to remedying a failure include mitigating its effect, and

(c)references to dealing with assets include disposing of them.”

(8)After section 203 insert—

“203A5Records

(1)The Bank of England must maintain satisfactory arrangements for—

(a)recording decisions made in the exercise of its functions under this Part, and

(b)the safe-keeping of those records which it considers ought to be 10preserved.

(2)The duty in subsection (1) does not apply to a decision to issue a notice under section 204(1).

203BAnnual report

(1)At least once a year the Bank of England must make a report to the 15Treasury on—

(a)the discharge of its functions under this Part,

(b)the extent to which, in its opinion, in discharging those functions its financial stability objective has been met, and

(c)such other matters as the Treasury may from time to time direct.

(2)20Subsection (1) does not require the inclusion in the report of any information whose publication would in the opinion of the Bank of England be against the public interest.

(3)The Treasury must lay before Parliament a copy of each report received by them under this section.”

(9)25In section 204 (information)—

(a)after subsection (1), insert—

“(1A)The Bank of England may by notice in writing require the operator of a recognised inter-bank payment system to provide information which the Bank requires in connection with the 30exercise of its functions (whether under this Part or otherwise) in pursuance of its financial stability objective.”,

(a)in subsection (4)(a), for “and the FSA” substitute “, the FCA and the PRA”, and

(b)in subsection (6), for paragraph (b) (and the “and” at the end of it) substitute—

“(b)45the FCA,

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(ba)the PRA, and”.

89International obligations

In Part 5 of the Banking Act 2009, after section 206A insert—

206B International obligations

(1)5If it appears to the Treasury that any action proposed to be taken by the Bank of England in exercising its powers under this Part would be incompatible with EU obligations or any other international obligations of the United Kingdom, the Treasury may direct the Bank not to take that action.

(2)10If it appears to the Treasury that any action which the Bank of England has power under this Part to take is required for the purpose of implementing any such obligation, the Treasury may direct the Bank to take that action.

(3)A direction under this section—

(a)15may include such supplemental or incidental requirements as the Treasury consider necessary or expedient, and

(b)is enforceable on an application by the Treasury, by injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988.”

20Further amendments

90Amendments relating to new regulators

Schedule 17 contains amendments of the Banking Act 2009 related to the provisions of Part 2 of this Act.

Part 825Miscellaneous

Amendments of Companies Act 1989

91Amendments of Companies Act 1989

(1)Section 166 of the Companies Act 1989 (power of Secretary of State to give directions to recognised investment exchange or recognised clearing house) is 30amended as follows.

(2)In subsection (2)(a)—

(a)for “Authority”, in the first place, substitute “appropriate regulator”, and

(b)for “Authority”, in the second place, substitute “regulator”.

(3)35In subsection (2)(b)—

(a)for “Authority”, in the first place, substitute “appropriate regulator”, and

(b)for “Authority”, in the second place, substitute “regulator”.

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(4)In subsection (3)—

(a)for “Authority” substitute “appropriate regulator”,

(b)omit the “or” following paragraph (a), and

(c)at the end insert—

“(c)5in either case, that the direction is necessary having regard to the public interest in the stability of the financial system of the United Kingdom, or

(d)in either case, that the direction is necessary—

(i)to facilitate a proposed or possible use of a 10power under Part 1 of the Banking Act 2009 (special resolution regime), or

(ii)in connection with a particular exercise of a power under that Part.”

(5)In subsection (7)—

(a)15for “Authority”, in the first place, substitute “appropriate regulator”, and,

(b)omit the words from “The Authority shall not” to the end.

(6)After that subsection insert—

“(7A)Where the exchange or clearing house is acting in accordance with a 20direction under subsection (2)(a) that was given only by virtue of paragraph (a) of subsection (3), the appropriate regulator shall not give a direction under subsection (7) unless it is satisfied that the direction under that subsection will not impede or frustrate the proper and efficient conduct of the default proceedings.

(7B)25Where the exchange or clearing house has taken action under its default rules without being directed to do so, the appropriate regulator shall not give a direction under subsection (7) unless—

(a)it is satisfied that the direction under that subsection will not impede or frustrate the proper and efficient conduct of the 30default proceedings, or

(b)it is satisfied that the direction is necessary—

(i)having regard to the public interest in the stability of the financial system of the United Kingdom,

(ii)to facilitate a proposed or possible use of a power under 35Part 1 of the Banking Act 2009 (special resolution regime), or

(iii)in connection with a particular exercise of a power under that Part.”

(7)In subsection (8), for “Authority” substitute “the regulator which gave the 40direction”.

(8)At the end insert—

“(9)The appropriate regulator”—

(a)in relation to a recognised UK investment exchange, means the FCA, and

(b)45in relation to a recognised UK clearing house, means the Bank of England.”

(9)In the heading, omit “of Secretary of State”.

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Settlement systems

92Evidencing and transfer of title to securities without written instrument

In section 785 of the Companies Act 2006 (provision enabling procedures for evidencing and transferring title), at the end insert—

“(7)5The regulations may confer functions on any person, including—

(a)the function of giving guidance or issuing a code of practice in relation to any provision made by the regulations, and

(b)the function of making rules for the purposes of any provision made by the regulations.

Director of Savings

93Provision of services by Director of Savings

(1)The Director of Savings (“the Director”) may enter into arrangements with a 15public body for the provision by the Director, or persons authorised by the Director, of services to the body.

(2)Arrangements are to be on such terms, including terms as to payment, as may be agreed.

(3)“Public body” means a person or body whose functions are of a public nature.

20Part 9General

Further amendments and repeals

94Further minor and consequential amendments and repeals

(1)Schedule 18 contains further amendments of FSMA 2000 and other 25enactments.

(2)Schedule 19 contains further consequential repeals.

Orders

95Orders: general

(1)Any power of the Treasury or the Secretary of State to make an order under this 30Act is exercisable by statutory instrument.

(2)Any order made by the Treasury or the Secretary of State under this Act may—

(a)contain such incidental or transitional provision as the Treasury consider appropriate, and

(b)make different provision for different cases.

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96Orders: Parliamentary control

(1)A statutory instrument containing (alone or with other provision) an order to which subsection (2) applies may not be made unless a draft of the instrument has been laid before Parliament and approved by a resolution of each House.

(2)5This subsection applies to—

(a)an order under Part 3 (mutual societies);

(b)an order under section 98 (power to make further consequential amendments) that amends or repeals primary legislation.

(3)A statutory instrument containing an order under this Act, other than an 10instrument to which subsection (1) applies or an instrument containing only provision made under section 102 (commencement), is subject to annulment in pursuance of a resolution of either House of Parliament.

97Interpretation

“the UK financial system” means the financial system of the United 25Kingdom.

(3)In this Act “enactment” includes—

(a)an enactment contained in subordinate legislation within the meaning of the Interpretation Act 1978;

(b)an enactment contained in, or in an instrument made under, an Act of 30the Scottish Parliament;

(c)an enactment contained in, or in an instrument made under, a Measure or Act of the National Assembly for Wales;

(d)an enactment contained in, or in an instrument made under, Northern Ireland legislation.

35Consequential and transitional provisions

98Power to make further consequential amendments etc

(1)The Treasury or the Secretary of State may by order make such provision amending, repealing, revoking or applying with modifications any enactment to which this section applies as they consider necessary or expedient in 40consequence of any provision made by or under this Act.

(2)This section applies to—

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(a)any enactment passed or made before the passing of this Act, and

(b)any enactment passed or made on or before the last day of the Session in which this Act is passed.

(3)Amendments and repeals made under this section are additional to those 5made by or under any other provision of this Act.

99Transitional provisions and savings

(1)Schedule 20 contains transitional provisions.

(2)Schedule 21 contains provision about the transfer of property, rights and liabilities.

(3)10The Treasury may by order make such provision as they consider necessary or expedient for transitory, transitional or saving purposes in connection with the commencement of any provision made by or under this Act.

(a)make provision enabling any person by whom any powers will become 15exercisable, on a date set by or under this Act, by virtue of any provision made by or under this Act to take before that date any steps which are necessary as a preliminary to the exercise of those powers;

(b)make provision treating any rules made, permission given or other thing done by the Financial Services Authority before commencement 20under an enactment amended by this Act—

(i)as having been made, given or done under a corresponding provision of the enactment as so amended;

(ii)as having been made, given or done (or also made, given or done) by the PRA or the Bank of England;

(c)25make provision for the continuation of proceedings begun before commencement, including provision about the decisions available to bodies before which such proceedings take place and the effect of their decisions;

(d)make provision for making savings, or additional savings, from the 30effect of any repeal or revocation made by or under this Act.

(a)confer functions on the Treasury, the FCA or the PRA, or on the Bank of England or its Financial Policy Committee;

(b)modify, exclude or apply (with or without modifications) any 35enactment (including any provision of, or made under, this Act).

(6)In subsection (4) “commencement” means the commencement of such provisions of this Act as may be specified by the order.

Final provisions

100Financial provision

(1)40There is to be paid out of money provided by Parliament—

(a)any expenditure incurred under or by virtue of this Act by a Minister of the Crown or government department (apart from any expenditure to be met from the National Loans Fund), and

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(b)any increase attributable to this Act in the sums payable under any other Act out of money so provided.

(2)There is to be paid out of the National Loans Fund any increase attributable to this Act in the sums payable under any other Act out of that Fund.

1015Extent

This Act extends to England and Wales, Scotland and Northern Ireland.

102Commencement

(1)The following provisions come into force on the day on which this Act is passed—

10sections 95 to 98;

section 99(3) to (8);

sections 100 and 101;

this section;

section 103.

(2)15Section 93 comes into force at the end of the period of 2 months beginning with day on which this Act is passed.

(3)The remaining provisions of this Act come into force on such day as the Treasury may by order appoint.

(4)Different days may be appointed for different purposes.

10320Short title

This Act may be cited as the Financial Services Act 2012.

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SCHEDULES

Section 3

SCHEDULE 1Bank of England Financial Policy Committee

Part 15Schedule to be inserted as Schedule 2A to Bank of England Act 1998

This is the Schedule to be inserted in the Bank of England Act 1998 after Schedule 2—

Section 9B

“Schedule 2AFinancial Policy Committee

Terms of office of appointed members

1(1)10Appointment under section 9B(1)(d) or (e) as a member of the Financial Policy Committee is to be for a period of 3 years, but this is subject to sub-paragraph (2) and to paragraph 3.

(2)Initially some appointments may be for shorter and different periods so as to secure that appointments expire at different times.

2(1)15A person may not be appointed as a member of the Committee under section 9B(1)(e) more than twice.

(2)For this purpose an appointment which by virtue of paragraph 1(2) is for a period of less than 3 years is to be disregarded.

3(1)If it appears to the Chancellor of the Exchequer that in the 20circumstances it is desirable to do so, the Chancellor may, before the end of term for which a person is appointed as a member of the Committee under section 9B(1)(e), extend the persons’s term of office on one occasion for a specified period of not more than 6 months.

(2)25The term being extended may be the person’s first or second term or, in a case where paragraph 2(2) allows a third term, the person’s third term.

(3)If a person whose first term of office is extended is subsequently re-appointed under section 9B(1)(e)—

(a)30the length of the second term is to be reduced by a period equal to the extension of the first term, but

(b)the second term may itself subsequently be extended under sub-paragraph (1).

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(4)In a case where a person’s second term of office is extended and paragraph 2(2) allows a third term, sub-paragraph (3) is to be read as if the references to first and second terms were references to second and third terms respectively.

4(1)5A person appointed under section 9B(1)(d) or (e) may resign the office by written notice to the Bank.

(2)Where the notice relates to a person appointed under section 9B(1)(e), the Bank must give a copy of the notice to the Treasury.

5(1)The terms and conditions on which a person holds office as a 10member of the Committee appointed under section 9B(1)(e) are to be such as the Bank may determine.

(2)The function of determining terms and conditions of office under sub-paragraph (1) is to stand delegated to the sub-committee constituted by section 3.

15Qualification for appointment

6(1)The following persons are disqualified for appointment under section 9B(1)(d) or (e)—

(a)a Minister of the Crown;

(b)a person serving in a government department in 20employment in respect of which remuneration is paid out of money provided by Parliament.

(2)A member of the Monetary Policy Committee of the Bank appointed under section 13(2)(c) is disqualified for appointment under section 9B(1)(e).

25Removal of appointed members

7A person appointed under section 9B(1)(d) or (e) vacates office on becoming a person to whom paragraph 6(1)(a) or (b) applies.

8A person appointed under section 9B(1)(d) vacates office on ceasing to have executive responsibility within the Bank for the 30analysis of threats to financial stability or, as the case may be, the analysis of markets.

9(1)The Bank may, with the consent of the Chancellor of the Exchequer, remove a member appointed under section 9B(1)(d) or (e) (“M”) if it is satisfied—

(a)35that M has been absent from 3 or more meetings of the Committee without the Committee’s consent,

(b)that M has become bankrupt, that M’s estate has been sequestrated or that M has made an arrangement with or granted a trust deed for M’s creditors, or

(c)40that M is unable or unfit to discharge M’s functions as a member.

(2)The Bank may, with the consent of the Chancellor of the Exchequer, also remove a member appointed under section 9B(1)(e) (“M”) if it is satisfied that in all the circumstances M’s

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financial or other interests are such as substantially to affect the functions as member which it would be proper for M to discharge.

(3)The function of removing a member under sub-paragraph (1) or (2) is to stand delegated to the sub-committee constituted by 5section 3.

Meetings

10(1)The Committee shall meet at least 4 times in each calendar year.

(2)The Governor of the Bank (or in the Governor’s absence the Bank’s Deputy Governor for financial stability) may summon a meeting 10at any time on giving such notice as the person giving the notice thinks the circumstances require.

Proceedings

11(1)At a meeting of the Committee, the proceedings are to be regulated as follows.

(2)15The quorum is to be 7 (excluding the Treasury’s representative) and of the 7—

(a)one must be the Governor of the Bank or the Bank’s Deputy Governor for financial stability,

(b)unless both those mentioned in paragraph (a) are present, 20one must be either of the other Deputy Governors of the Bank, and

(c)one must be a member appointed under section 9B(1)(e).

(3)The chair is to be taken by the Governor of the Bank or, if the Governor is not present, by the Bank’s Deputy Governor for 25financial stability.

(4)The person chairing the meeting must seek to secure that decisions of the Committee are reached by consensus wherever possible.

(5)Where that person forms the opinion that consensus cannot be reached, a decision is to be taken by a vote of all those members 30present at the meeting.

(6)In the event of a tie, the person chairing the meeting is to have a second casting vote.

(7)At a meeting of the Committee—

(a)the Treasury’s representative may not vote, and

(b)35anything done by the Treasury’s representative is to be disregarded in determining under sub-paragraph (4) or (5)whether there is a consensus.

(8)Subject to sub-paragraphs (2) to (7) and paragraph 14, the Committee is to determine its own procedure.

1240The Committee may, in relation to sub-paragraph (2), (3), (4) or (5)of paragraph 11, determine circumstances in which a member who is not present at, but is in communication with, a meeting is to be treated for the purposes of that sub-paragraph as present at it.